B-220574.4, MAY 14, 1986, OFFICE OF GENERAL COUNSEL

B-220574.4, MAY 14, 1986, OFFICE OF GENERAL COUNSEL

BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE - BID NONRESPONSIVE DIGEST: BIDDER WHO FAILED TO ACKNOWLEDGE A MATERIAL AMENDMENT TO SOLICITATION MAY NOT HAVE SUCH FAILURE WAIVED SINCE, GENERALLY AWARD OF A FORMALLY ADVERTISED CONTRACT MUST BE MADE TO THE LOW RESPONSIBLE BIDDER WHO HAS SUBMITTED A RESPONSIVE BID.

THE HONORABLE BILLY TAUZIN:

MEMBER, UNITED STATES HOUSE OF REPRESENTATIVES

2439 MANHATTAN BOULEVARD, SUITE 304

HARVEY, LOUISIANA 70058

THIS IS IN REPLY TO YOUR REQUEST OF APRIL 7, 1986, FOR OUR COMMENTS ON THE CORRESPONDENCE ENCLOSED BY YOU FROM B.F. CARVIN CONSTRUCTION CO., INC. (CARVIN), CONCERNING THE AWARD OF A CONTRACT FOR REPLACEMENT OF ROOFING UNDER INVITATION FOR BIDS (IFB) NO. N62467-85-C-7249 ISSUED BY THE SOUTHERN DIVISION, NEW ORLEANS AREA, NAVAL FACILITIES ENGINEERING COMMAND (NAVFAC).

CARVIN ESSENTIALLY IS QUESTIONING OUR DECISION IN WEST ALABAMA REMODELING, INC., B-220574, DEC. 26, 1985, 85-2 CPD PARA. 718. IN THAT DECISION, WE SUSTAINED WEST ALABAMA'S PROTEST AGAINST THE NAVY'S AWARD OF THE CONTRACT TO CARVIN UNDER THE IFB REFERENCED ABOVE.

THE NAVY ACCEPTED CARVIN'S BID WHICH FAILED TO ACKNOWLEDGE AN AMENDMENT WHICH CHARGED THE REQUIREMENT FOR ROOF SHINGLES TO A CLASS "A" SHINGLE WITH A WARRANTY OF 20 YEARS FROM A CLASS "C" SHINGLE WITH A WARRANTY OF 15 YEARS UNDER THE UNREVISED IFB. THE NAVY CONCLUDED THIS AMENDMENT HAD A TRIVIAL EFFECT ON THE PRICE AND THAT, BASED ON THIS CONCLUSION, THE FAILURE TO ACKNOWLEDGE THE AMENDMENT COULD BE WAIVED. WE DISAGREE WITH THE NAVY'S ACTION BECAUSE WE FOUND THAT THE AMENDMENT CHANGE WAS MATERIAL AND THUS COULD NOT BE WAIVED. UNDER THESE CIRCUMSTANCES, WE DETERMINED THAT CARVIN'S BID WAS NONRESPONSIVE AND THAT THE NAVY'S AWARD TO CARVIN WAS IMPROPER. WE RECOMMENDED THAT THE NAVY TERMINATE THE CONTRACT WITH CARVIN.

WHILE ORDINARILY WE WOULD HAVE RECOMMENDED AWARD TO THE NEXT ELIGIBLE BIDDER, THE NAVY STATED THAT THE CLASS "C" SHINGLE WITH A 15 YEAR WARRANTY WOULD HAVE MET ITS NEEDS. THE NAVY FURTHER STATED THAT ITS INTENT BY ISSUING THIS AMENDMENT REQUIRING CLASS "A" SHINGLES WAS TO INCREASE COMPETITION BECAUSE CLASS "C" SHINGLES WITH A 15-YEAR WARRANTY WERE THOUGHT TO BE GENERALLY UNAVAILABLE. IN VIEW OF THE NAVY'S STATEMENT, WE CONCLUDED THAT THE RESTRICTION TO ONE TYPE OF SHINGLE WITH A 20-YEAR WARRANTY WAS AN OVERSTATEMENT OF THE GOVERNMENT'S NEEDS. WE RECOMMEND CANCELLATION OF THE IFB AND RESOLICITATION ON A LESS RESTRICTIVE BASIS.

NAVFAC SUBSEQUENTLY REQUESTED RECONSIDERATION OF OUR DECISION AND IN WEST ALABAMA REMODELING, INC.-- RECONSIDERATION, B-220574.2, FEB. 7, 1986, 86-1 CPD PARA. 141, WE AFFIRMED OUR DECISION. BY LETTER OF MARCH 27, 1986, THE NAVY ADVISED US THAT IT WOULD COMPLY WITH OUR RECOMMENDATION TO TERMINATE THE AWARD TO CARVIN AND TO RESOLICIT THE REQUIREMENT.

BY LETTER TO OUR OFFICE OF MARCH 5, 1986, A MONTH AFTER OUR DECISION AFFIRMING OUR INITIAL DECISION, CARVIN ARGUED THAT ITS FAILURE TO ACKNOWLEDGE THE AMENDMENT PROPERLY WAS WAIVED BY THE CONTRACTING OFFICER. ADDITIONALLY, CARVIN ARGUED THAT THE AMENDMENT DID NOT AFFECT THE CONTRACT PRICE OR PERFORMANCE AND ITS BID PRICE WAS $21,000 LESS THAN THE WEST ALABAMA REMODELING, INC., BID PRICE. WE VIEWED CARVIN'S LETTER AS A REQUEST FOR RECONSIDERATION.

OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 21 (1985), APPLICABLE TO THIS PROTEST, PROVIDE THAT RECONSIDERATION MAY BE REQUESTED BY THE PROTESTER, ANY INTERESTED PARTY WHO SUBMITTED COMMENTS DURING THE CONSIDERATION OF THE PROTEST, AND ANY AGENCY INVOLVED IN THE PROTEST. 4 C.F.R. SEC. 21.12(1985); JARVIS B. WEBB COMPANY; EATON KENWAY, INC.-- RECONSIDERATION, B-218110.2, FEB. 11, 1985, 85-1 CPD PARA. 181. SINCE CARVIN WAS ON NOTICE OF THE PROTEST, BUT DID NOT COMMENT THEREON, CARVIN WAS NOT ELIGIBLE TO REQUEST RECONSIDERATION.

THIS ABOVE CITED PROVISION LIMITS THOSE PARTIES WHO ARE ELIGIBLE TO REQUEST RECONSIDERATION OF A DECISION OF THIS OFFICE, CONSISTENT WITH OUR BELIEF THAT TO THE MAXIMUM EXTENT POSSIBLE OUR DECISIONS SHOULD BE FINAL, THUS ENSURING THE PROMPT RESOLUTION OF PROTESTS AND THE LEAST NECESSARY DISRUPTION OF THE PROCUREMENT PROCESS. IN THIS CONNECTION, THE COMPETITION IN CONTRACTING ACT OF 1984, 31 U.S.C.A. SEC. 3554(A)(1) (WEST SUPP. 1985), PROVIDES THAT GAO SHALL PROVIDE AN EXPEDITIOUS RESOLUTION OF PROTESTS.

CARVIN WAS ON NOTICE OF THE PROTEST AND HAD AN OPPORTUNITY TO PARTICIPATE IN THE BID PROTEST PROCESS WHERE IT COULD HAVE RAISED THE ISSUES IT NOW SEEKS TO HAVE US CONSIDER. THUS, UNDER THOSE CIRCUMSTANCES, WE THINK OUR DISMISSAL OF CARVIN'S REQUEST TO FURTHER CONSIDER THE MATTER, 5 MONTHS AFTER IT RECEIVED NOTICE OF THE PROTEST, WAS PROPER.

IN ANY EVENT, CARVIN'S ALLEGATIONS WERE RAISED BY THE NAVY IN THE PROTEST AND WE CONSIDERED AND DENIED THESE ALLEGATIONS IN OUR INITIAL PROTEST DECISION AND OUR DECISION IN RESPONSE TO THE NAVY'S REQUEST FOR RECONSIDERATION. IN THIS CONNECTION, CARVIN ARGUES, AS DID THE NAVY, THE AMENDMENT WAS NOT MATERIAL AND THE NAVY PROPERLY WAIVED IT. HOWEVER, AS WE POINTED OUT IN OUR DECISION, WARRANTY PROVISIONS ARE GENERALLY MATERIAL REQUIREMENTS OF A SOLICITATION. WE FOUND THAT HERE THE EFFECT OF THE WARRANTY REVISION WAS TO GUARANTEE THAT THE SHINGLE WOULD LAST 5 YEARS LONGER. THEREFORE, WHILE ARGUABLY THE AMENDMENT HAD A MINIMAL EFFECT ON PRICE, IT REPRESENTED A SIGNIFICANT CHANGE IN THE CONTRACTOR'S LEGAL OBLIGATION. IN THESE CIRCUMSTANCES, WE CONCLUDED THAT THE REQUIREMENT COULD NOT HAVE BEEN WAIVED AND CARVIN'S BID WAS NONRESPONSIVE.

WITH REGARD TO CARVIN'S ARGUMENT THAT AWARD TO THE FIRM WOULD RESULT IN SAVINGS TO THE GOVERNMENT SINCE IT WAS THE LOW BIDDER, WE CONSISTENTLY HAVE HELD THAT A NONRESPONSIVE BID MAY NOT BE ACCEPTED, NOTWITHSTANDING ANY SAVINGS IT MIGHT REPRESENT TO THE GOVERNMENT, SINCE SUCH ACCEPTANCE WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. THE HOMER D. BRONSON CO., B-220162, NOV. 22, 1985, 85-2 CPD PARA. 591. MOREOVER, THE IFB OVERSTATED THE NAVY'S NEEDS AND A RESOLICITATION ON THE LESS RESTRICTIVE BASIS SHOULD RESULT IN LOWER PRICES.

FINALLY, CARVIN'S LETTER TO YOU REQUESTS THAT CARVIN BE GIVEN PROPER NOTICE OF TERMINATION SO THAT IT CAN ASSERT ANY REMEDIES IT MAY HAVE CONCERNING THE TERMINATION. THIS IS A MATTER THAT IS HANDLED BY THE PROCURING ACTIVITY. AS NOTED ABOVE, ON MARCH 27, THE NAVY INDICATED THAT CONSISTENT WITH OUR RECOMMENDATION IT WOULD TERMINATE FOR THE CONVENIENCE OF THE GOVERNMENT ITS CONTRACT WITH CARVIN. THUS, WE WOULD EXPECT THE NAVY TO NOTIFY CARVIN OF ITS ACTION IN THE NEAR FUTURE AND CARVIN CAN ASSERT ANY CLAIMS IT MIGHT HAVE UNDER THE DISPUTES CLAUSE OF ITS CONTRACT.

WE ARE FURNISHING COPIES OF THE DECISIONS CITED IN THIS LETTER. REQUESTED, WE ARE RETURNING THE CORRESPONDENCE ENCLOSED WITH YOUR APRIL 7 LETTER. WE TRUST THAT THIS INFORMATION IS HELPFUL.